walkitout (walkitout) wrote,
walkitout
walkitout

the every few years credit report binge

Every once in a while, I go collect a free credit report and start canceling unused accounts. Sometimes I skip the credit report stage when I decide the wallet has gotten a bit too thick. I hadn't done this in a while (cause I have a toddler), and once again, the store cards accepted because they came with some massive percentage off that I accepted in a weak moment, plus a card I quit using a couple years ago when they _neglected to mail me a statement_. That alone, fine. I called them to ask where was the statement, and by that time had late fees (well, duh) and their response to my, hey, I didn't _get_ the statement was basically, you should know when your statement is due and call sooner.

I was flabbergasted (and this was back in April of 2006) and honestly haven't stopped being appalled and disgusted any time since. I'm much more accustomed to having people be nice to me when I call to say, pretty please, it's going to be two days late I just got back from a long trip and am catching up on mail. And having the whole thing go away as if it had never happened.

In any event, I collected the credit report, canceled a couple of store cards (no bad against the store; I just don't use them and don't much like them) and wrote a snippy letter to the evil card company. Discussion with R. ensued and he speculated that this would negatively impact my credit score and maybe that's not such a good idea seeing as how we're thinking of shopping for a home loan in a few months. This pretty much made me see red, when he wouldn't leave that theory alone, because credit scores had _nothing_ to do with this particular action (seeing a link to the site where you can pick up your free credit reports, however, did, when I was reading the Boston Globe online).

I actually have a decent idea how Fair, Isaac puts together their score. I'm pretty damn sure that closing an account that has been zero balance for months, and has an outstanding credit limit of let's just call it five figures, below the middle and leave it at that - closing such an account isn't going to have much of an effect. Further, given that that is about half of my overall available/unused credit, my personal feeling is that any sensible soul looking to make a loan is going to look at my Fico (and we'll get to that in a minute), whatever it might be and say, that's good, look at the overall available credit and say, we are not comfortable with the idea you could go on that kind of spending spree. How's about you close one of those cards; shouldn't be a problem; you don't use it anyway, 'k? Because people doing home loans care about more than your Fico.

And in any event, closing an unused credit card shouldn't hammer a Fico score that hard anyway, right?

Sometime later this evening (like, a few minutes ago), I figured I'd go look at what Fair, Isaac had to say about their scoring, which mostly confirmed what I believed (closing unused credit is largely a no-op) but did throw a wrench into the mix: that particular account has been open since 1995, and therefore affects the average length of credit history. Hmmm. It's not the oldest account I have (stunningly enough, my Macy's card started out as a $100 limit Bon Marche card in _1987_). Which then made me wonder, what _is_ my Fico score, and do I care if it's affected somewhat by closing this account (which, to be fair, remains on my report and therefore a part of my score, for years and years and years anyway)?

Fair, Isaac will sell you your score; they also have a promo going on one of their subscriptions. If I can manage to cancel it in 30 days, I'm in business. So, off to check my score at Equifax, having already collected the Experian report. Once I _have_ the explanation, I retrieve my jaw from the floor because I realize the number I am looking at is not, in fact, a sample score. It's _my_ score. And the first digit is an 8.

Perhaps I shall taunt R. tomorrow morning. I think this kind of score could readily tolerate, say, closing an unused account. Even if it is one of the older ones I have.

ETA: It looks like closing the store accounts (which aren't very old) might conceivably help with average age of accounts. Closing the 13 year old *sigh* but evil and unused account would net out 1 year younger on average (so from just over 9 to just over 8). That Macy's card turns out to be _extremely_ worthy. Whodathunk? However, shutting down half the credit would increase percentage used of available credit (I don't run a balance, but I do use the cards every month). That is a bit of a dilemma.

ETA2: And for reasons best known to ... nobody anywhere at all, Equifax has my birthdate wrong, Experian has it right, and collectively, they know three of my employers -- with zero overlap. Go figure.
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